For first-time home buyers, it may feel like there are always new obstacles in the way of buying your dream home. But, don’t sweat! There are many options available to help you purchase your first home. The government has many FTHB (first-time home buyer) initiatives to help you get the ball rolling in this tough housing market economy. It may feel like a lifetime before you’ll be able to afford a place but, with my expertise as a mortgage broker, I can help you navigate all the options that will make buying your first home a reality.
First, should you accept government loans, loans from a bank, or help from a mortgage broker?
Always remember that a loan is something that you have to pay back with interest. It’s important to have a financial plan laid out so you don’t go into further debt while doing so. Sitting down with a financial advisor, like myself, Darren Robinson is a great way to consolidate your debt and create a game plan for the future. That way you can figure out what you can realistically afford while carving out a path to follow that will lead you to achieve your goal of becoming a first-time home buyer. Sure, you may want the penthouse suite in a condo or a mansion with lots of land, but let’s start from the bottom and work our way there. Getting pre-approved by a mortgage broker, like me, will help you determine how much of a mortgage you can afford so you can look for houses or condos within your budget. But, you’ll take comfort knowing that when you’re ready to make an offer, your financing is in order.
HOT TIP: Don’t be afraid to ask for help.
Many young homebuyers are now seeking financial assistance from their parents or grandparents to be able to afford a house. Whether you use a co-signer, get a loan from a family member for a down payment, or a lump-sum monetary gift, seeking assistance from your family is quite common.
The government’s first-time home buyer initiatives are there to help and encourage more young people to buy their first homes. Be sure to do your research to find out what grants or funding you can take advantage of. Or, book an appointment through my website and we can walk through the different incentives being offered and how they work together. I’ve outlined a few below for you to take a look at as well.
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The First-Time Home Buyers Incentive
What is it and how does it work?
This incentive helps first-time homebuyers cover 5% – 10% of the purchase price of the house through an interest-free loan to put towards a down payment. This helps lower your mortgage rate by having a larger down payment than you originally intended. You have to pay the government back the same percentage of your home when you sell or after you’ve owned the home for 25 years.
How do you qualify?
To qualify for this loan, you will have to review your household income, mortgage amount, and location. This is for first-time home buyers only, so you must NOT have owned a home before to qualify. Your household income must be less than $120,000, or $150,000 if you are purchasing in Toronto, Vancouver, or Victoria. This program has been extended until 2025. For more information on qualifying, check it out here.
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The Affordable Homeownership Program
What is it and how does it work?
This program is similar to the First-Time Home Buyers incentive but is used to help low-to-moderate income rental households become homeowners by providing a 10% down payment in a forgivable loan. It also encourages developers to build more affordable housing throughout Simcoe County.
How do you qualify?
To qualify for the program, you must be a resident in the County of Simcoe and can only use one government incentive program at a time. You cannot own any additional properties and the house you buy is for you to live in and not to be purchased as an investment property. You must also meet the income requirements when you apply.
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The Home Buyers’ Plan
What is it and how does it work?
Through this program, you can withdraw up to $35,000 from your registered retirement savings plan (RRSP). Couples can withdraw up to $70,000. The money must be repaid annually over 15 years, otherwise, it’s taxed as income.
How do you qualify?
To qualify, you must be a first-time home buyer and the owner of the RRSP account. This program is unique in that you can use the money to buy a home for someone with a disability. You must live in the house for over a year and must be a resident of Canada however.
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The Land Transfer Tax Rebate
What is it and how does it work?
The land-transfer tax paid on the first $368,000 of qualifying homes may be eligible for a rebate of up to $4,000 for first-time home buyers.
How do you qualify?
To claim the refund, you must be a legal adult who has never owned a home or had an interest in a home.
Ready to get pre-approved for the mortgage you need? I can help!
If you’re unsure of which program best suits your needs or you’re not sure where to start, I can help! Not only can I help you qualify for a mortgage, but I can show you how each government program can benefit you specifically based on your financial situation. In addition, I can advise you on which one would be best suited to your needs. Buying a house shouldn’t be impossible. I’m here to show you how easy it can be! Give me, Darren Robinson, a call at 705-315-0516 or book an appointment now for more information.